It's even worse on a month-by-month basis. June saw China sales decline by 2.3 percent from a year earlier. The first half of 2015 saw sales up only 1.4 percent.

One manager at a Mercedes store told Reuters customer traffic was down 20 to 30 percent in the last few weeks compared to the same period a year ago.

Keep an eye on U.S.-traded Chinese auto stocks like Bitauto, which provides Internet content marketing services for China's automotive industry, down roughly 20 percent in the last month, and Autohome, which operates automobile websites, down roughly 12 percent this month.

And the Chinese stock market? I wrote about the mind-boggling list of government intervention efforts yesterday. The main question is whether the government can engineer an unwinding of margin financing, and early signs are that they are moving in that direction. Margin financing levels have fallen 30 percent from their peak but are still at elevated levels. Macquarie Group estimates they are only halfway through the process.

But all the intervention has come at considerable cost, not just to the government's image, but to the idea that China's stock market has any relation to the Chinese economy.

I'm not the only one that feels that way. Reviewing the current state of the Chinese market, Macquarie came to the same conclusion: "We see no correlation between stock market performance and either the property market or overall consumption growth."